McGraw Hill FY27 sales outlook $2.115B-$2.175B vs est

McGraw Hill reported fiscal year 2026 revenue of $2.1 billion, exceeding IPO expectations, with recurring revenue growing 6% to represent over 73% of total revenue. The company launched eight AI learning tools serving over 7.5 million users and announced plans for three additional tools. For fiscal year 2027, McGraw Hill expects revenue between $2.115 billion and $2.175 billion, with adjusted EBITDA guidance set to grow to a range of $750 million to $790 million. The company reduced gross debt by $646 million in fiscal year 2026 and announced a $50 million share repurchase plan.

Fourth-quarter revenue was $464 million, down 2% year-over-year, reflecting a smaller K12 market opportunity partially offset by continued outperformance in higher education. Recurring revenue totaled $373 million while digital revenue reached $393 million, representing 81% and 85% of total revenue respectively. Fiscal year adjusted EBITDA was $744 million, up 2% year-over-year, with margin expanding nearly 80 basis points to 35.4%. The company highlighted significant investments in literacy curriculum, viewing the science of reading as a major growth area.

Financial Highlights

Metric	Fiscal Year 2026	Fiscal Year 2027 Guidance
Revenue	$2.1 billion	$2.115 billion - $2.175 billion
Recurring Revenue	$1.5 billion	$1.587 billion - $1.607 billion
Adjusted EBITDA	$744 million	$750 million - $790 million
Adjusted EBITDA Margin	35.4%	35.9% (midpoint)
Unlevered Free Cash Flow	$335 million	~$400 million

Strategic Developments

Management emphasized the strategic use of AI in education, noting the development of agentic AI tools and partnerships aimed at expanding McGraw Hill's reach beyond traditional education markets. The company is piloting a new agentic AI tool to make its precision education experience accessible as a trusted AI agent. In higher education, fiscal year revenue grew 12% year-over-year to $879 million, driven by market share gains approaching 31%.

Challenges in the K12 market were noted, particularly with the slower-than-anticipated adoption of the California math curriculum, though long-term opportunities in literacy were emphasized. The company has invested over $100 million in its new Science of Reading ELA program, Emerge, Summit and Soar. McGraw Hill remains focused on achieving a net leverage target of two to two and a half times.

McGraw Hill, Inc. announced that Philip Moyer, President, Chief Executive Officer and member of the Board of Directors, will participate in a virtual investor call hosted by Goldman Sachs on Friday, June 12, 2026. The session, scheduled for 2:00 PM ET, will focus on McGraw Hill in the context of Goldman Sachs' AI Resilience framework within the Information Services sector. This engagement provides investors with insight into the company's positioning regarding artificial intelligence advancements.

Call Details

The event features George Tong, Equity Research Analyst at Goldman Sachs, who will moderate the discussion with McGraw Hill's leadership. The call is exclusively virtual, requiring interested participants to complete registration in advance.

Detail	Information
Date	Friday, June 12, 2026
Time	2:00 PM ET
Location	Virtual
Host	Goldman Sachs – George Tong, Equity Research Analyst
Company Participant	McGraw Hill, Inc. – Philip Moyer, President, CEO and Board Member

Registration Information

Attendance is restricted to registered individuals. To secure access, stakeholders must contact their designated Goldman Sachs representative or reach out via email to christina.cikowski@gs.com .

McGraw Hill (NYSE: MH) operates as a global provider of education solutions for preK-12, higher education, and professional learning markets. The company delivers content and personalized learning experiences utilizing data, technology, and learning science across more than 80 languages.